U.S. Dollar Gains Ground Against Canadian Dollar
USD/CAD is currently trying to settle above the resistance level at 1.2625 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index has recently managed to get above the 93 level and is currently testing the resistance at 93.10. In case the U.S. Dollar Index manages to settle above 93.10, it will move towards yearly highs near 93.40 which will be bullish for USD/CAD.
Today, U.S. reported that Retail Sales declined by 1.1% month-over-month in July compared to analyst consensus of -0.3%. Earlier, Consumer Sentiment report missed analyst estimates, and the market looks worried that U.S. consumer activity is under pressure.
Foreign exchange market traders also took a look at U.S. Industrial Production and Manufacturing Production reports. Industrial Production increased by 0.9% month-over-month in July compared to analyst consensus which called for growth of 0.5% while Manufacturing Production increased by 1.4% compared to analyst consensus of 0.6%.
Traders also monitored the developments in commodity markets as WTI oil found itself under pressure on worries about the spread of the Delta variant of coronavirus. Currently, WTI oil is trying to settle below the $67 level. A successful test of this level will open the way to the test of the recent lows near the $66 level which will be bearish for commodity-related currencies, including Canadian dollar.
USD to CAD managed to get above the major resistance level at 1.2590 and is trying to settle above the next resistance level which is located at 1.2625. In case USD to CAD gets above this level, it will move towards the next resistance at 1.2650.
A successful test of the resistance at 1.2650 will push USD to CAD towards the next resistance at 1.2685. If USD to CAD manages to settle above 1.2685, it will move towards the resistance at 1.2710.
On the support side, the previous resistance at 1.2590 will serve as the first support level for USD to CAD. A move below this level will push USD to CAD back towards the support at 1.2550.
In case USD to CAD moves below 1.2550, it will get to the test of the support at the 20 EMA at 1.2540. A successful test of the support at the 20 EMA will open the way to the test of the next support at 1.2500.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire